MARKET REPORT:ON A DAY when the Government stepped in to guarantee the security of bank deposits, it was inevitable that the focus of the stock market would be the financial sector.

A day after shedding 26 per cent of their value, Irish financials jumped 27.65 per cent bringing them close to the levels at which they ended last week.

However, traders cautioned that the fundamentals impacting bank share prices remained the same and that, despite the massive injection of funds across Europe, credit markets are still frozen.

All the banks saw elevated levels of trading. Anglo Irish Bank was again the most significant market player yesterday. A day after its precipitous 46 per cent decline focused Government minds, the bank surged 67.13 per cent in heavy trading to finish on €3.844 - still below the €4.27 at which it ended last week.

Irish Life Permanent raced ahead by 35.8 per cent to €4.85, while Bank of Ireland closed on €3.95, 68 cent or 20.8 per cent firmer.

AIB was the relative underperformer of the sector but it still jumped 18 per cent, or 90 cents, to €5.90.

Even after yesterday's rally, the four main banks are nursing losses so far this year of between 59 and 65 per cent and, given the recent volatility, traders were wary of reading anything into yesterday's resurgence.

The reaction among financials to the Government initiative may have been enthusiastic but trading elsewhere in the market was desultory and the Iseq ended the session 7.87 per cent firmer one day after shedding more than 13 per cent.

CRH slipped back in end-quarter trading, closing on €15, down 37 cents or 2.4 per cent.

Kerry, on the other hand, was in demand, adding €1.15, or 5.8 per cent, to end the session on €20.80.